News

by Andria Papageorgiou

Procedures for the receipt of reports of infringement of Regulation (EU) No. 596/2014 on market abuse

We would like to draw your attention to the Circular C488 (the “Circular”) issued by the Cyprus Securities and Exchange Commission (the “CySEC” of the “Commission”) on the 17^th of February 2021, under the provisions of Article 2(1) of the Regulation (EU) No 596/2014 as amended (the “Market Abuse Regulation”), in relation to the updated procedures in force regarding the receipt of reports of infringement pursuant to the provisions of Article 32 of the Market Abuse Regulation.

In brief, please note the following:

A. Reporting Requirements:

• The staff members of the Market Surveillance and Investigations Department of CySEC dedicated to the handling of the reports of infringements (the “Competent Department”) have been assigned with specific duties in order to assist and provide information on the procedures for reporting infringements to any interested person.
• The report of infringement can be submitted either by name or anonymously, through the communication channels of the Competent Department as further specified under point A3 of the Circular.
• A person who is accused of having committed an actual or potential infringement of the Market Abuse Regulation (the “Reporting Person”), may proceed with the submission of a written report of infringement by completing the “Whistleblowing External Disclosure Form” (the “Form”) which is available as an Appendix within the Circular.
• In cases when the identity of the Reporting Person has been disclosed, CySEC may request further information.
• Upon the submission of the infringement report, either orally or written, CySEC notifies the Reporting Person in writing within how many days will be notified about the results of his/her inquiry and ensures that the relevant notification will be sent within the timeframe set.

B. Record Keeping of the Infringement Reports:

• Unless otherwise requested by the Reporting Person, a receipt of a confirmation is sent by CySEC.
• In cases where reporting of infringements has been performed through the use of a telephone line, CySEC has the right to document the oral reporting, except the cases where Reporting Person’s prion consent is not provided.
• In cases where Reporting Person’s consent is not provided for the reporting of infringements, CySEC has the right to document the conversation in the form of accurate minutes.
• In cases where a person requests a physical meeting with the Competent Department for the purposes of reporting the infringement, CySEC ensures that complete and accurate records of the meeting are kept in a durable and retrievable form.
• In cases where the confidentiality regime is used, CySEC notes that under certain circumstances as those explained in point C of the Circular, confidential information of the Reporting Person may be published.

To this end and as per Article 6(6) of the Market Abuse Law of 2016, a person providing information to CySEC, in accordance with the Market Abuse Regulation, is not considered to be infringing any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, nor will the said person have the liability of any kind related to such disclosure.

In case you have any questions, please do not hesitate to contact us for further professional assistance.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.

by Andria Papageorgiou

Andria Papageorgiou Law Firm awarded by The Lawyers Global Awards 2021

It is with great pleasure to announce that Andria Papageorgiou Law Firm has been awarded as an Outstanding Law Firm, within the regions of Europe, Eastern Europe, and Cyprus,  by The Lawyers Global (TLG), which is the ultimate exclusive directory for Elite Law Firms and Lawyers.

The award was received by the firm’s Founder, Mrs. Andria Papageorgiou.

Law firms have overcome the numerous challenges imposed by an atypical and unprecedented global crisis. Some of the challenges resulted, in many cases, in the capability of law firms to adjust, innovate, and find the paths for successful outcomes. Congratulations to all the Awarded law firms that proved to deserve their recognition and become listed at The Lawyers Global as The Law Firms’ Elite.

We are elated with this major achievement of our Law Firm as this recognizes the hard work and commitment during our very fresh beginning as a newborn Law Firm, with a legacy of a long experience in both legal and financial services sectors.

Our aim is to remain dedicated to bringing the highest value of service to our clients in any sector or industry they operate in, ready to provide bespoke advice and legal services tailored to the client.

Thank you to all friends, associates, and clients for their continuous and valuable support.

In case you have any questions, please do not hesitate to contact us for further professional assistance.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.

Signed-Awards-Certificate-2021-A4

by Andria Papageorgiou

Registration of the Ultimate Beneficial Owner(s) (“UBOs”) to the Registrar of Companies

The Department of the Registrar of Companies and Official Receiver, has been appointed as the Competent Authority for the operation of the Registration of the UBOs of Companies and Other Legal Entities, based on the Prevention and Suppression of Money Laundering Activities and Financing Terrorism Law and similar Directives.

Hence, all registered/incorporate legal entities, have the obligation to submit electronically, the information of their UBOs under the Beneficial Owners Register operated in the Department of the Registrar of Companies and Official Receiver.

The Partnerships who are registered in the Company’s Registrar have also been included in the list of the entities with the above respective obligation.

UBO can be considered as the physical person who owns/control a legal Entity or the physical person to whom an activity or transaction is operated by a third party.

• Direct ownership means a physical person who holds the 25% of shares plus 1 share or shares over 25%
• Indirect ownership means a legal entity/ies who hold on behalf of the physical person/s the 25% of shares plus 1 share or shares over 25%

Based on the above, the Companies and Other Legal Entities (Partnership) incorporated before 12/03/2021, are obligated to submit in Registrar of Companies the information required for the real beneficial owners the latest by 12/03/2022.

The submission must be done electronically by the Company or any other Legal Entity (Partnership) via the Government Gateway Portal (Ariadni), that operates since 16.03.2021 without any fees.

The steps for the electronic submission, that need to be taken, are as follows:

1. Each Company or Partnership must create a profile as an Organization in the Government Gateway Portal (Ariadni) https://eservices.cyprus.gov.cy.
2. The Identification of the Entity’s / Partnership profile must be done by the physical presence of the Entity’s/Partnership representative at the following authorized centres:

• Unified Service Center (CSR) – 13-15 Andrea Araouzou, 1421 Nicosia
• District Post Offices (KEPO)
  • Nicosia – 100 Prodromou, 2063
  • Limassol – 16 June 1943 (former Gladstonos) 3022 Paphos –
  • Aristotelis Savva 23, 8025
  • Larnaca – Vassileos Pavlou Square, 6023
• Citizens’ Service Centers (KEP)
  • Nicosia – Georgiou Seferis, 2415 Engomi
  • Limassol – Spyrou Araouzou 21, 3036
  • Famagusta – Eleftherias 83, 5380 Deryneia

The following companies have an exception from the UBOs registration:

1. Companies that are licensed under a Regulated Market and are subject to notification requirements based on the European Union Legislation.
2. Companies which are, subject to equivalent international standards that ensure the ownership transparency.
3. Companies which submitted to the Registrar of Companies, the application for the deletion of their officers based on the article 327(2A)(a) of the Companies Law before 12/03/2021 or the companies that were without any officers before 12/03/2021.
4. Companies to which the liquidation procedure has started before 12/03/2021.

More details in relation to the submission of the Beneficial owner’s information in the Register and its operation can be found at the following links:

1. Regulatory Administrative Act No 112/2021
2. At the manual for the Interim Solution of the Register of Real Beneficiaries: CLICK HERE
3. To the answers on frequently asked questions in relation to the Real Beneficiaries: CLICK HERE
4. Το the announcements of the Registrar of Companies.

Based on the above the Ministry of Energy, Commerce and Industry and the Department of the Registrar of Companies and Official Receiver, are inviting you to proceed as soon as possible and before the 12 March 2022, with the submission of the Real Beneficiaries information at the Real Information Register. Please note that no further extension will be given.

During the collection and submission of the Beneficial Owners’ information, no penalties will be imposed against the entities, until 12/03/2022. Any changes as to information of the UBOs should be submitted within 14 days since the day of the information/changes is acknowledged.

In case you have any questions, please do not hesitate to contact us for further professional assistance.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.

by Andria Papageorgiou

Circular C475: Sanctions Imposed by the Office of Foreign Assets Control (“OFAC”) of the U.S. Treasury Department

With Circular C475 and on continuation to the Circulars C266 and C337, CySEC draws your attention to the continuously updated list of the latest U.S. sanctions (available here), which inter alia, contains Cyber related Designations and Designations Updates.

Sanctions imposed individually by third countries are not enforceable in the EU, but CySEC expects the Obliged Entities falling under their supervision to take such measures into account, in the context of their relevant risk assessment and take proportionate action, including refraining from engaging with affected persons.

This Circular serves as a reminder to Obliged Entities of their obligations and particularly to CASPs, of the content of CySEC’s Policy Statement on the Registration and Operations of CASPs (“PS-01-2021”, available here), according to which CASPs, are inter alia expected to have in place policies, procedures, systems and controls to ensure compliance with a risk based approach (Paragraph 2.2.2.4 of PS-01-2021 elaborates further on the subject matter).

In case you have any questions, please do not hesitate to contact us for further professional assistance.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.

by Andria Papageorgiou

New Incentive Scheme To Be Launched To Attract High Tech Companies

Cyprus Government presented recently a new proposal for the attraction of businesses and digital nomads, placing an emphasis on domains related to High-tech, Research & Development and Shipping.

The establishment of this proposal has an attempt to make Cyprus an attractive investment destination in the wider region and Europe and is expected to come into force as from January 2022.

In general the suggested main pillars of the new proposal are as follows:

A. Employment of Non-EU Nationals:

Employment of Non-EU Nationals with a General Minimum salary of €2.500 for highly skilled employees, while a university degree or at least 2 years experience are required. The work permits will be issued within one month and will last up to 3 years. The maximum work permits for Non-EU Nationals per Company is 70% for a 5-year period. The Companies will need to be able to employ Non-EU Nationals as supporting staff with salaries below €2.500 (Maximum 30% of the total supporting staff of the entity).

B. Employment of family members:

Non-EU employee’s spouses, who are employed in a Company operating under the provisions of the Business Facilitation Unit (excluding the supporting staff category) will also have immediate and free access to Cyprus labour market.

C. Digital Nomad Visa:

A new type of permit the so-called Digital Nomad Visa will be introduced for those who wish to live in Cyprus but work remotely for companies operating abroad. This Digital Nomad Visa will have a maximum quota of 100 applications. The visa will be granted for the period of 1 year with the right to renew it for another 2 years. The Digital nomads’ minimum threshold of funds coming from abroad (salary, bank statements, etc.) is €3.500, plus an additional 20% for the spouse and 15% for any minor.

D. Naturalization of Non-EU Nationals employed in Cyprus:

According to the new proposal, non-EU Nationals who are employed in Cyprus, will be able to apply for citizenship after 5 years of residency instead of 7. For those who have a very good knowledge of the Greek language with a proof of certification, will be able to apply for citizenship after 4 years.

E. Simplification of the process for obtaining Permanent Residency:

The actual proposal provides a simple process for obtaining Immigration Permits and Long-Term residency permits. Relevant Regulations of the Aliens and Migration Law will be amended in order to speed up the process of the applications.

F. AP Law Firm:

Andria Papageorgiou Law Firm can assist with any of the above matters. Therefore, should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.

by Andria Papageorgiou

Benefits of doing business in Cyprus in 2021

A. Introduction

Cyprus has a modern, free-market, service-based economy giving international investors and domestic businesses confidence to invest, grow and prosper. The tertiary sector of services is considered the backbone of the Cyprus economy and with a high income per capita, the consumer market is particularly strong.

B. Reasons why Cyprus is one of the best options for your business

1. Many Investment Opportunities
   Cyprus offers many investment opportunities.It is one of the most touristic countries in the Mediterranean and Europe as a whole; it is one of the global shipping powers; it has a thriving real estate business, and its financial business still has a ton of room to grow.There are also other opportunities in gas, agricultural and fishing.
2. Entryway To Europe
   Cyprus is a popular destination for businesses that are starting to operate in Europe. In a continent where there’s so much fiscal and bureaucratic pressure, Cyprus is a breeze of fresh air.Starting and running a business is simple. If you wish to start a financial business, financial licenses in Cyprus are reputable offering peace of mind for investors and have passporting rights.It means you can choose Cyprus as your European headquarters to operate your business without any additional licensing requirements for other EU members or needing to establish branches or offices.
3. Cyprus Is Business Friendly
   The government took many business initiatives. For example, it introduced many tax incentives, opened the country to investors, established an attractive non-dom status for foreigners and provided tax credits for fund managers.It also created citizenship and residency by investment programs, and reformed banking laws so that banks could securitize loans, reducing their NPL exponentially.
4. Bilingual Population And Workforce
   More than 70 % of the Cypriot population speaks English, and the island has a well-established expat community.More than half of the Cypriot residents hold tertiary qualifications as well. This means the island has an apt public sector and top-notch service providers of all kinds (accounting, legal services, tax planning, and more) that can help you start operating in Cyprus.
5. Quality Low Cost Of Living Environment
   When compared to the services and easy life offered by the country, its cost of living is among the lowest in the European Union.The country has a modern infrastructure with great telecommunications. All this led to Cyprus being named the 5th best relocation destination in the world by a Knight Frank report, one of the world’s leading real estate consultants.This is why the country has the second-highest percentage of foreigners in the EU, with almost 20%.

C. Benefits of doing business in Cyprus

Our Clients looking to set up a business in Cyprus will enjoy a fast, stress-free and cost effective process because:

• A Cyprus Limited Liability Company can be 100% foreign owned and required only 1 shareholder and director of any nationality who can either be an individual or a corporate entity and must not be resident in Cyprus; It would be worth mentioning that all shareholders and director’s details of a Cyprus company are available for public viewing on the Cyprus Department of Registrar of Companies website; which may not be ideal for foreign investors seeking anonymity;
• The share capital of the company does not have to be fully paid in cash at the time of incorporation. You can pay it up later at any stage.
• Foreign owned companies are permitted to invest in every business sector in Cyprus without any restrictions or stringent licensing requirements except for a few regulated sectors such as banking and financial services and media;
• Using our Law Firm, our Client can obtain a Cyprus company registration number and tax number and commence the operations in Cyprus within a period of 2 weeks;
• Following business registration, our Law Firm can open a corporate bank account with one of the leading banks in Cyprus, including Bank of Cyprus and Hellenic Bank without our Client traveling to Cyprus;
• You can open a bank account for a Cyprus company in any country you want;
• Entrepreneurs registering business in Cyprus will enjoy considerably lower administrative and operational costs compared to most of other countries in the EU region.

Our Client doing business in Cyprus will benefit from various tax incentives including:

• The standard corporate tax rate in Cyprus is 12.5%, which is one of the lowest corporate tax rates in Europe, if generated within Cyprus, otherwise its corporate tax is 0%. Cyprus is a low tax jurisdiction not a Tax Haven.. Additionally, the government does not impose any capital gains tax; For a company to tax advantage of the multiple Cyprus’ tax treaties and the 12.5% corporate tax rate, a company is required to appoint at least one director who must be resident in Cyprus;
• A Cyprus holding company enjoys exemption from withholding taxes on dividends paid to a resident company whether they are received from a foreign company or another Cyprus resident company;
• Local companies will benefit from a wide network of double taxation treaties. The government of Cyprus had signed over 55 DTAs with at least 47 countries, including China, India, Ireland, Singapore, the United Kingdom and the United States;
• Companies will enjoy exemption from corporate income tax on income sourced from operations abroad as well as exemption from capital gains tax and estate duty on income from immovable property outside Cyprus.

Other advantages prompting foreign entrepreneurs and investor to consider doing business in Cyprus include:

• Up to 80% of income generated by Cypriot companies engaged in activities related to Intellectual Property (IP) is exempt from taxes; only 20% of the total profits is liable for taxes;
• Although seen as a safe haven for taxes, Cyprus is listed on the OECD ‘white list’ of global jurisdictions that are fully compliant with the international standards of tax;
• Tax resident companies can carry forward their tax losses incurred within a fiscal year for the subsequent 5 years and the same can be offset against the taxable income;;
• As a member of the European Union, Cyprus enjoys all the benefits of the EU regulations and treaties including, and particularly, the free movement of capital within and outside the EU region.

Cyprus laws are investor friendly due to the reasons given below:

• An opportunity to acquire Cyprus citizenship is offered to all the investors in Cyprus. A Cyprus citizenship has all the benefits that an EU citizenship has, i.e. the right to live, work, and move freely within the entire EU area; In October 2020, the Cypriot government abolished its golden visa program for wealthy investors. Therefore, the foreign investors cannot currently acquire citizenship by investment, but there are other options we could discuss and advise you further.
• Incorporation of a Cyprus company gives the right to the Real Owner and his family members to a long stay visa for two years (renewable) and work permit. In 7 years to a Cyprus, they can apply for a Cyprus citizenship and get an EU passport;
• A Cyprus company can be re-domiciled abroad to any other country;
• Cypriot laws allow the investor to retain their anonymity and hold their property under an international trust; 100% tax exemption on inward and outward dividends.

D. Conclusion

Cyprus is an ideal location for establishing a regional headquarters for a company with a global presence. Located int eh easter Mediterranean between Europe, Middle East and North Africa, Cyprus is an optimum jurisdiction to centralise and coordinate a company’s intercontinental operations;

Additionally, for Clients looking to establish abroad to minimise tax implications, Cyprus is a good choice of jurisdiction for legal tax optimisation;

Cyprus is an attractive place for new entrepreneurs aiming to engage in young and innovative businesses. These innovative start-up companies are provided with numerous tax benefits including a deduction of the qualified expenditure incurred from the investor’s taxable income of up to 50% of the taxable income or €150,000, whichever is lesser.

If you need to settle in Cyprus, you will enjoy a beautiful country with a mild climate, no crime rate, hospitable population, plenty of human recourses for your needs, a fantastic cuisine and tasty fruits and vegetables.

E. AP Law Firm

Andria Papageorgiou Law Firm can assist you with any matter relevant to the below:

• Corporate and Commercial;
• Employment;
• Immigration;
• Real Estate;
• Intellectual Property;
• Data Protection;
• Banking and Finance;
• Regulatory and Licensing Advisory

Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.

by Andria Papageorgiou

CySEC New Directive for the Registration of Crypto Providers

The Cyprus Securities and Exchange Commission (CySEC) issued on Friday a directive about the registration and operating conditions of providers of services related to cryptocurrencies. According to the guidelines, published only in the Greek language, CySEC provides certain procedures to follow in order to comply with the recent transposition of AMLD5 measures taken in the European Union (EU) to combat Anti-Money Laundering and Counter-Terrorist Financing.

The registration fee for the providers who want to apply before CySEC for authorization under the said directive would be EUR 10,000, and the renewal fee shall be EUR 50,000. In terms of the board’s composition, there should be a minimum of four members: two executives and two non-executives. Furthermore, among the conditions set out in the said directive, the companies should comply with some requirements such as good reputation, appropriate policies, systems and procedures, relevant security policies, and remuneration requirements, as specified by the CySEC.

In addition to the said directive, it is expected that the CySEC will issue a policy statement very soon clarifying other relevant matters. Additionally, there is a CySEC application file available with the updated regulatory requirements to follow the AMLD5 rulings.

It is well admitted by CySEC, who shares the position of the European Securities and Markets Authority (ESMA), that some crypto assets, including the so-called virtual currencies, such as Bitcoin, are highly risky and speculative, and investors must be alert to the high risks of buying and/or holding these instruments, including the possibility of losing all their money. Crypto assets come in many forms but the majority of them remain unregulated in the EU including Cyprus.

In light of all the above, it is quite evident that the incorporation of crypto-asset businesses under the scope of the EU AML legislation under the amended 5th AML Law in Cyprus is a very significant step.

Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information. 

by Andria Papageorgiou

The Use of Electronic Signature

Undoubtedly and unsurprisingly, the COVID-19 pandemic has affected businesses and individuals in a variety of ways. One aspect, which has been discussed to a great extent, is the use of electronic signatures in Cyprus and the legal implications of their use.

The Regulation (EU) N 910/2014

In an aim to improve trust in EU-wide electronic transactions and to increase the effectiveness of public and private online services and e-commerce, Regulation (EU) N 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the “eIDAS Regulation”) created a new system for secure electronic interactions across the EU between businesses, citizens and public authorities, setting out the conditions under which Member States recognize electronic identification means of natural and legal persons falling under a notified electronic identification scheme of another Member State, rules for trust services (for the verification of the identity of individuals and businesses online, as well as authenticity of documents) and establishing a legal framework for electronic signatures, seals, time stamps, documents, registered delivery services and certificate services for website authentication.

The Cyprus Law 55(I)/2018

The eIDAS Regulation has been incorporated into Cyprus law in 2018 through Law 55(I)/2018 (the “Law”).

The three types of electronic signatures

Three types of electronic signatures, each with different judicial value, are distinguished by the Regulation, as follows:
1. an “electronic signature” is defined by the Regulation as “data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign”;
2. an “advanced electronic signature” is “an electronic signature which is uniquely linked to the signatory, is capable of identifying the signatory, is created by using electronic signature creation data that the signatory can, with a high level of confidence, use under their sole control and is linked to the data therewith in such a way that any subsequent change in the data is detectable”; and
3. a “qualified electronic signature”, which is an advanced electronic signature created by a qualified electronic signature creation device having the added comfort of being based on a qualified certificate for electronic signatures.

Admissibility and legal validity of electronic signatures

The Regulation specifies that an electronic signature cannot be denied legal effect or be deemed inadmissible as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures. However, it grants the “qualified electronic signature” the most significant judicial value deeming that it shall be equivalent to a handwritten signature.

Obtaining a qualified electronic signature

The procedure of obtaining a qualified electronic signature under Cyprus law was announced in May, amidst the COVD-19 pandemic, by the Deputy Ministry of Research, Innovation and Digital Policy of Cyprus. The Cyprus Stock Exchange has been authorised as a Certification Service Provider to issue qualified certificates on electronic signatures, though the government has already signed a Memorandum of Understanding with commercial banks that will enable and promote electronic signatures in the banking sector.

The validity period of such qualified e-signatures is currently set at one year from the date of issuance of the qualified certificate.

The sole Qualified Trust Service Provider (QTSP) currently registered in Cyprus is JCC Payment Services Ltd and, there are just two other Greek Companies, registered in Europe, carrying out activities in Cyprus: Byte Computer ΑΕ and ADACOM S.A. However, with the passing of the new legislation it is likely that these companies will face competition.

Difficulties and complications

While electronic signatures and even advanced electronic signatures were occasionally used prior to the COVID-19 pandemic, an increase in their use was noticed under the current circumstances. Such increased use of digital signatures has highlighted certain issues with their applicability and implementation. One such problem arises with documents that require witnessing. Common law provisions, applicable in Cyprus, require the physical presence of witnesses in the same location as the signatory. Therefore, a witnessing and attestation requirement is only satisfied in the case of an electronically executed document where the witness is physically present in the same location as the signatory. While the witness can still attest the document via a digital signature from the same location as the signatory, “remote” witnessing (e.g. by video link) is not permitted.

However, it is worth mentioning that certain, if not all, local authorities and institutions are still reluctant in accepting the digital signatures. In addition, it is evident that there are still no judicial decisions in relation to the use and implementation of electronic signatures, in order to see how the Cypriot courts would interpret and apply the relevant regulatory and legal provisions.

Last but not least is the fact that heavy dependence on electronic means will bring a higher demand for cyber security which may include a requirement for the use of electronic passports. Steps such as the creation of an electronic passport are likely to meet with resistance from some sectors of society, since, whilst they are superficially equivalent to a biometric identity card, they include continuously updated real data about an individual.

Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.

by Andria Papageorgiou

ESMA Guidelines (ESMA35-36-1952) on certain aspects of the MiFID II compliance function requirements

The European Securities and Markets Authority (ESMA) has published the Guidelines on certain aspects of the MiFID II compliance function requirements (‘the Guidelines’), on 6 April 2021 translated in all official languages of the EU. These Guidelines, replace the previous ESMA guidelines on the same topic issued in 2012.

The Guidelines apply in relation to the requirement of the Regulated Entities who, as part of their obligations under the Investment Services and Activities and Regulated Markets Law of 2017 (‘the Law’), must ensure that the compliance function fulfils the requirements set out in Article 22 of MiFID II Delegated Regulation 565/2017 by maintaining an efficient compliance function in accordance with Article 17(2) of the Law.

The Guidelines’ objective is the establishment of consistent, efficient and effective supervisory practices and to ensure the common, uniform and consistent application of certain aspects of the MiFID II compliance function.

Therefore, these Guidelines aim at requiring the Regulated Entities to have a robust governance framework by implementing systems and controls, policies and procedures, establishing an independent and effective compliance function to manage risks and ensure compliance with their regulatory obligations.

In brief, the said Guidelines focus on the below areas:

1. Guideline on the compliance risk assessment;
2. Guideline on the monitoring obligations of the compliance function;
3. Guideline on the reporting obligations of the compliance function;
4. Guideline on the advisory and assistance obligations of the compliance function;
5. Guideline on the effectiveness of the compliance function;
6. Guideline on the skills, knowledge, expertise and authority of the compliance function;
7. Guideline on the permanence of the compliance function;
8. Guideline on the Independence of the compliance function;
9. Guideline regarding the proportionality with regard to the effectiveness of the compliance function;
10. Guidelines on combining the compliance function with other internal control functions;
11. Guidelines on outsourcing of the compliance function;
12. Guidelines on the review of the compliance function by competent authorities;

The Guidelines apply from two months of the date of publication of the guidelines on ESMA’s website in all EU official languages, i.e. 07 June 2021.

CySEC adopts these Guidelines by incorporating them into its supervisory practices and regulatory approach.

Regulated Entities must take the necessary actions in order to ensure their compliance with the Guidelines.

Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information. 

by Andria Papageorgiou

EU List of third country non-cooperative jurisdictions for tax purposes and possible implications

In last February the ECOFIN Council updated the EU list of third country non-cooperative jurisdictions for tax purposes (the so-called EU ‘blacklist’) and the list became official upon publication in the Official Journal on 26 February 2021.

The EU list of non-cooperative jurisdictions for tax purposes is a tool to tackle:

• tax fraud or evasion: illegal non-payment or under payment of tax
• tax avoidance: use of legal means to minimise tax liability
• money laundering: concealment of origins of illegally obtained money

The updated EU ‘blacklist’ includes the following jurisdictions:

• American Samoa
• Anguilla
• Dominica
• Fiji
• Guam
• Palau
• Panama
• Samoa
• Seychelles
• Trinidad and Tobago
• US Virgin Islands
• Vanuatu

The EU has previously decided that, as from 2020, the list will be updated twice a year.

Various defensive measures are currently being enacted by EU Member States which should negatively affect entities resident in jurisdictions on the EU ‘blacklist‘. These defensive measures include increased withholding taxes (WHT), stricter CFC rules, denial of deductibility of expenses, denial of participation exemption, increased monitoring and audits, special documentation requirements etc.

From a Cyprus tax angle, it is noted that the Cypriot Ministry of Finance recently submitted to Parliament a draft bill (currently having an effective date as from 1 July 2021) which introduces WHT for certain payments to companies in the EU ‘blacklist’ jurisdictions, as follows:

• For payments of dividends, WHT at the rate of 17%;
• For payments of passive interest, WHT at the rate of 30%; and
• For payments of royalties, WHT at the rate of 10%.

Finally, increased DAC6 reporting obligations may apply to certain related party transactions between companies in the EU and the EU ‘blacklisted’ jurisdictions, as the relevant Hallmark can be met irrespective if the Main Benefit Test is also satisfied.

Should you have any further questions, please do not hesitate to contact us at info@apapageorgiou.com.

Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.